Stock of the day: Alibaba
26 September 2024
Alibaba's recent performance has been notably bullish, following a crucial breakout from the symmetric triangle pattern that has been guiding the stock's movements for months. This breakout provided a strong long-term buy signal, and the market's response has been overwhelmingly positive. Over the past few weeks, Alibaba’s share price has climbed steadily, almost without interruption, indicating strong buying momentum and investor confidence.
However, the stock now faces a critical test as it approaches a significant resistance level, defined by a green downtrend line that has connected the highs since 2022. This line represents a crucial barrier for the bulls. A daily close above this resistance would not only confirm the continuation of the current uptrend but also open the door for a much larger rally. It would signal a shift in the long-term trend dynamics and could potentially attract even more buyers into the market.
On the flip side, if the price fails to break above this resistance and instead reverses, it could offer a short-term selling opportunity. This scenario would suggest that the recent bullish momentum is losing steam and that the bears are still in control, at least temporarily.